COURT FILE NO.: FS-15-83509-00 DATE: 2023 10 06
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Joan Deloris McPherson, Applicant AND: Neville Alexander McPherson, Respondent
BEFORE: M.T. Doi J.
COUNSEL: Granville Cadogan, for the Applicant Vanessa Sampogna, for the Respondent
HEARD: April 3, 5 and 6, 2023
REASONS FOR JUDGMENT
Overview
1The parties twice entered into settlement agreements. However, they could not agree on what they had agreed upon. Both accept that a settlement they signed in 2016 was later amended by an agreement signed on January 7, 2020. In addition, both agree that the 2020 agreement is valid and binding. But each now has a different view as to what the 2020 agreement means. Moreover, despite their apparent complete settlement of this proceeding in 2020, each party has raised a number of unresolved issues.
2For the reasons that follow, judgment is granted as set out below.
Background
3The parties married on December 22, 1990. After initially living in the United States, they relocated to Canada and settled in Brampton. They separated on May 29, 2015 and later divorced pursuant to Woollcombe J.’s divorce order dated April 14, 2019. The Respondent father has since re-partnered.
4There are three (3) children of the marriage: Stephanie McPherson born January 3, 1993, Alexcya McPherson born August 11, 2000, and Therecian McPherson born November 20, 2002. Stephanie is now independent. Alexcya and Therecian are dependent children who reside with the Applicant mother as they pursue their post-secondary education.
5Over the course of the marriage, both parties contributed funds to support the family. Each had a role in managing the household finances, albeit with varying degrees of responsibility.
6During the marriage, the parties bought the matrimonial home located on Hollowgrove Blvd. in Brampton (“Hollowgrove”). They also bought a home on Chalkfarm Cres. in Brampton (“Chalkfarm”) as an investment property.
7After separation, the children resided at Hollowgrove with the Applicant mother. The Chalkfarm property generated rental income that was used to pay for its mortgage and carrying costs until the property was sold on January 2, 2019 after Seppi J. granted a consent order for its sale on September 21, 2018. About $309,427.25 in net sale proceeds from Chalkfarm’s sale are currently being held in trust.
8The father is employed as an awning technician. The mother had an insurance agent licence which lapsed as she infrequently worked in that capacity. From about 2007 until 2010, she was heavily involved in running a restaurant (i.e., by incorporating the venture, cooking meals, and acting as a signing officer) which the parties set up with other business partners. At one point, the parties had planned for the father to transition from his employment to the restaurant. But before his transition could proceed, the restaurant restructured and then closed after incurring significant losses and debts which the parties paid down for years afterwards. Sometime in 2011, the mother started to parent a number of foster children who lived at the family home. As a foster parent, she received funds to provide for the foster children along with per diem funds as tax-free income.
9On May 9, 2015, the mother brought this family application. 1 On May 29, 2015, the parties separated after the mother accused the father of infidelity and confronted him about taking funds from their joint line of credit. Following a heated conversation, the father left the Hollowgrove matrimonial home and called police. When police attended, the mother indicated that she was uncomfortable in the father’s presence. Police asked him to leave the home. The mother then changed the locks to the home and called police when the father re-entered after Therecian unlocked a door for him. Police allowed the father to pack some personal items in a suitcase before asking him to vacate the premises. The father later took up residence at Chalkfarm.
10On June 15, 2015, the father delivered his answer in this proceeding.
11The oldest child, Stephanie, began university in August 2011 and was a university student when the parties separated. The father agreed to pay half of her university tuition, which amounted to $27,000.00 (i.e., being one-half of the $54,516.00 in tuition that had been paid for Stephanie to complete a degree in forensic science at the University of Windsor) by the time that she graduated in July 2016. She is now 30 years old and is living independently.
12Alexcya is 22 years old and is pursuing an undergraduate degree at York University. Therecian is 20 years old and is attending a post-secondary program at Humber College.
13Dr. Marjan Saghatoleslami, Psy.D., C. Psych., a clinical psychologist, has diagnosed Therecian with an intellectual developmental disorder affecting her attention, concentration, abstract thinking, problem solving, memory, ability to communicate, and academic skills, among other things. During elementary and secondary school, the child had individualized learning programs and supports to help with her academic progress. She now attends classes at Humber College with the mother who helps her to take notes, understand concepts, study, complete assignments and attend examinations. At this time, the mother claims to be unable to pursue full-time work as she is supporting Therecian with her education.
The Proceeding
14At a case conference on June 7, 2016, Snowie J. made an interim consent order for, among other things, the father to pay: a) $800.00 per month of interim child support (i.e., based on an income of $75,000.00 annually) starting June 15, 2016 without prejudice to a reconciliation of child support on further or better evidence; and b) carrying costs for Hollowgrove to maintain the status quo pending further order of the court. Although the Family Responsibility Office (“FRO”) enforced the temporary child support order by deducting $800.00 from the father’s monthly wages, the father did not fully comply with Snowie J.’s order to pay all carrying costs for Hollowgrove. He did, however, pay down the mortgage for Hollowgrove, as discussed further below.
15On October 9, 2016, the parties signed off on a joint net family property statement which their accountant, Rose Waldron, prepared on their instructions. By doing so, I am satisfied that the parties intended to adopt the figures in the jointly-prepared statement to settle the mother’s equalization claim by having the father make a $316,779.00 equalization payment (i.e., based on net family property of $77,012.00 for the mother and $710,570.00 for the father, respectively).
16After two (2) settlement meetings held on October 6 and 13, 2016, the father handwrote a draft settlement proposal, in consultation with his then-counsel, to resolve this proceeding. He then signed and served the proposal by email on November 18, 2016. During an in-person meeting the following day, the father handed the mother a copy of his signed settlement proposal. After taking some time to consider the father’s proposal, the mother signed the so-called “joint agreement” on December 21, 2016 (“Joint Agreement”). By doing so, she expressly agreed, among other things, to accept the equalization payment in the jointly-prepared net family property statement signed on October 9, 2016, which was appended as an exhibit to the Joint Agreement.
17After the parties executed the Joint Agreement, issues arose as to whether they were bound to its written terms and an alleged oral variation of its provisions. To resolve the issue, a summary judgment motion returned before Baltman J. on August 16, 2018.
18By Endorsement dated August 16, 2018, Baltman J. found that the motion raised serious credibility issues requiring viva voce evidence and listed the matter for trial in the January 2019 trial sittings. On consent, Baltman J. also ordered each party to pay $3,334.35 towards Alexcya’s university tuition (i.e., one-half of her $6,668.70 tuition fee) for the upcoming semester, referred the other issues in dispute to a combined settlement/trial management conference set for September 21, 2018, and granted some other relief.
19At the September 21, 2018 conference, Seppi J. granted a consent order for Chalkfarm to be sold on terms, along with other relief. Thereafter, the parties agreed to adjourn the trial to the January 2020 trial sittings.
20The sale of Chalkfarm closed on January 2, 2019. Following the sale, about $373,000.00 in net sale proceeds were placed in trust by the real estate solicitor.
21On July 18, 2019, the parties appeared before Shaw J. on the mother’s motion for an early release of funds from the net sale proceeds for Chalkfarm. To allow the father to file responding materials, Shaw J. adjourned the motion. 2 In addition, Shaw J. ordered $63,164.56 to be paid to the mother from the net sale proceeds held in trust to satisfy the father’s outstanding payments to her (i.e., his $59,829.00 share of Hollowgrove’s carrying costs under Snowie J.’s consent order dated June 7, 2016, plus his $3,334.35 share of Alexeya’s tuition fees under Baltman J.’s consent order dated August 16, 2018). Although the mother received a $63,164.56 payment from the trust proceeds, the payment was not drawn from the father’s share of the proceeds.
22During an exit pre-trial conference on January 7, 2020, the parties mutually agreed to be bound to the Joint Agreement from 2016 and signed a further written agreement entitled “Final Minutes of Settlement” to vary the terms at paragraphs 7, 8 and 11 of the 2016 Joint Agreement. None of the other terms of the 2016 agreement were varied by the Final Minutes of Settlement, as further explained below.
23On February 5, 2021, both parties moved to enforce the 2020 and 2016 agreements. After hearing submissions, Chown J. identified a number of issues and indicated that further submissions were needed to decide the motions: McPherson v. McPherson, 2021 ONSC 4066. However, the motions were not returned. Instead, the parties proceeded to trial.
Analysis
24On January 7, 2020, the parties executed Final Minutes of Settlement as follows:
Final Minutes of Settlement
The Parties, hereby, in full and final settlement of the within action, and all issues raised, adopt as full settlement of these matters and claims, the agreement executed by the Parties and attached hereto as Schedule A, and entitled “Joint Agreement” dated November 18, 2016, as of the date of first execution by the Parties Joan Deloris McPherson and Neville Alexander McPherson.
The Parties, in executing this, adopt and incorporate the terms of the Joint Agreement, except as specified below, and any variation as appearing below shall constitute an amendment of the said agreement which shall be incorporated and form part of the “Joint Agreement. The parties hereby amend paragraph 8 as follows:
The parties agree and consent that the stated amount of $64,000.00 does not exist, as originally contemplated and that no payment as agreed to is payable and that paragraph 8 shall be deleted except that the Respondent shall provide proof that the $64,000.00 or any amount is not payable to the Respondent, as contemplated under the said paragraph.
The Parties hereby amend paragraph 7 as follows:
The Respondent shall pay half of the $54,000.00, being $27,000.00 for Stephanie McPherson’s tuition. These funds will not come out of the proceeds of sale of the Chalkfarm property described [below].
The Respondent shall, upon receiving the said amounts at paragraph 5, shall execute a release in favour of the Applicant of all interest, equitable, constructive or otherwise, in the property municipally known as Hollowgrove Blvd., Brampton, Ontario, and shall execute all such other documents as may be requested or required to transfer the property into the sole name of the Applicant, and in default of the Respondent hereby authorize[s] the Applicant to execute such documentation on his behalf and this paragraph shall stand as a court order authorizing the execution of any such documents by the Applicant.
The parties agree and consent to the amendment of paragraph 11 of the Joint Agreement as follows:
a. The Applicant shall pay the Respondent $110,000.00 instead of $130,000.00 from the net proceeds plus $9,000.00 representing interest.
The funds held in Trust will be used first to pay all capital gains that the Respondent owes to CRA for the sale of the Chalkfarm property described in the Joint Agreement, Schedule A, paras 9 & 10, excluding penalties and interest, and the Respondent is directed to re-file his 2018 taxes within 30 days of the execution of this agreement.
The Applicant shall receive the balance of the funds held in trust after the payment of the capital gains and payment of $119,000.00 to the Respondent.
The Respondent shall provide the Applicant with a copy of his notice of assessment, proving the capital gains payable, prior to any payment of same from the funds held in trust, which shall be paid on the consent of both parties, directed to the real estate solicitor.
25Attached as Schedule “A” to the Final Minutes of Settlement dated January 7, 2020 is a copy of the Joint Agreement as signed in counterpart on November 18, 2016 and December 21, 2016, respectively. As amended, the Joint Agreement provides as follows:
Joint Agreement Between Joan and Neville McPherson
The following agreement between Joan and Neville McPherson was discussed and finalized on Sunday October 6th and 13th 2016. After a compromising negotiation, we were able to agree on the following unsettled issues that had long prolonged and divided us. The itemized issues have been agreed to.
77,000 lump sum payment to Joan McPherson out of my half of the equalization as spousal support.
I agree and accept Exhibit AC Equalization Payment.
Joan McPherson will have full custody of the two eligible children Alexcya and Terecian McPherson, only. In the event of any eventuality that render her incapacitated, I am willing to take full responsibility of my children.
Joan McPherson will grant Neville McPherson visitation of his children. Visitation and Access will be encouraged and given and, not spitefully hindered to jeopardize present and future health paternal relationship.
Child support of $1,000.00 for two children, Alexcya and Therecian McPherson until such time that they have pass the emancipated age of 18 and are no longer attending University or college. In the event that the Affordability exist in the future, I will be happy to increase the amount.
Take out an Affordable life insurance policy with Therecian McPherson as beneficiary. Due to her mild learning disability that can affect her future independence.
[as amended pursuant to paragraph 3 of the Final Minutes of Settlement]
The Respondent shall pay half of the $54,000.00, being $27,000.00 for Stephanie McPherson’s tuition. These funds will not come out of the proceeds of sale of the Chalkfarm property described [below].
Honor my half of Stephanie McPherson tuition (54,000) cost incurred while attending the University of Windsor as a student.
[as amended pursuant to paragraph 2 of the Final Minutes of Settlement]
The parties agree and consent that the stated amount of $64,000.00 does not exist, as originally contemplated and that no payment as agreed to is payable and that paragraph 8 shall be deleted, except that the Respondent shall provide proof that the $64,000.00 or any amount is not payable to the Respondent, as contemplated under the said paragraph.
To forward to Joan McPherson her half upon receiving the United State Income Tax Return. That amount will be determined by the IRS estimated in the amount of $64,663 (Canadian). Stephanie McPherson is due 10% and the remainder will be divided equally between Joan and Neville McPherson without prejudice.
The property at Chalkfarm Cres. will be sold. After deducting the current mortgage owing; the remainder will be used to satisfy the joint marital debt of the Hollowgrove Blvd. line of credit (310,581), the mortgage and the taxes due.
That my portion of the settlement will be derived from both Chalkfarm Cres. and the Hollowgrove Property. Joan McPherson is obligated to make sure that I receive my portion out of the Hollowgrove Cres. within 90 days. This is to ensure that my portion is available to be used as a down payment on an Affordable house if the mortgage on Chalkfarm Cres. can be transferred.
[as amended pursuant to paragraph 5 of the Final Minutes of Settlement]
The Applicant shall pay the Respondent $110,000.00 instead of $130,000.00 from the net proceeds plus $9,000.00 representing interest.
I accept out of the marital settlement that I will receive a total and final payment of 130,000 as a final settlement. All other portion will be surrendered to Joan McPherson.
Interpretation of a Domestic Contract
26When interpreting a contract, the court should give effect to the intention of the parties by considering the words they used to discern their reasonable expectations about the meaning of a contractual provision: Resolute FP Canada Inc v. Ontario (Attorney General), 2019 SCC 60 at para 74, citing Ledcor Construction Ltd v. Northbridge Indemnity Insurance Co, 2016 SCC 37 at para 65. The contract should be read as a whole and it words given their ordinary meaning in a way that is consistent with the surrounding circumstances or factual matrix known to the parties when the contract was formed: Sattva Capital Corp v Creston Moly Corp, 2014 SCC 53 at 47. The overriding goal is to determine the intent of the parties and the scope of their understanding through a practical and common-sense approach not dominated by technical rules of construction: Ibid. These principles also apply to the interpretation of a domestic contract: MacDougall v. MacDougall at paras 20-22; citing B.G. Checo International Ltd. v. British Columbia Hydro and Power Authority, [1993] 1 SCR 12 at 23-24, and Consolidated-Bathurst Export Ltd. v. Mutual Boiler and Machinery Insurance Co., [1980] 1 SCR 888 at 901; Tonogai v. Tonogai, 2021 ONSC 2366 at paras 38-39.
27When interpreting a domestic contract, Lang J.A. in MacDougall at para 22 observed that a court must search for an interpretation that accords with the parties' intention when they entered into the contract. To arrive at such an interpretation, the court must interpret the provision in the context of the entire contract, including the entirety of the section at issue, to discern the likely intention of the parties. Where more than one interpretation is possible, the court should favour an interpretation that promotes the reasonable expectations of the parties, affords a sensible result in the family law context, and avoids a result that the parties would not reasonably have expected when they entered into the contract: see also Knight v. Knight, 2018 ONSC 3294 at paras 179-180, affirmed 2019 ONCA 538.
Setting Aside a Domestic Contract
28When a married or formerly married spouse seeks spousal support where a separation agreement provides otherwise, two (2) statutes may be implicated. The Family Law Act addresses domestic contracts as a provincial property and civil rights matter; and the Divorce Act confers authority on the court to award support as corollary relief to a divorce: Faiello v. Faiello, 2019 ONCA 710 at para 14.
29A spouse seeking to set aside provisions in a separation agreement has the onus to show that the court should exercise its discretion to set aside the agreement under ss. 56(4) of the Family Law Act, which provides:
Setting aside domestic contract
(4) A court may, on application, set aside a domestic contract or a provision in it,
(a) if a party failed to disclose to the other significant assets, or significant debts or other liabilities, existing when the domestic contract was made;
(b) if a party did not understand the nature or consequences of the domestic contract; or
(c) otherwise in accordance with the law of contract
30A material non-disclosure of financial assets, debts, or income may implicate ss. 56(4) of the Family Law Act: Carvalho v. Couto, 2023 ONSC 4975 at para 19; Virc v. Blair, 2014 ONCA 393 at para 52, LeVan v. LeVan, 2008 ONCA 505 at paras 51 and 183; Dochuk v. Dochuk at para 17. However, even where a ground to set aside under ss. 56(4) is shown, the court must still decide whether it would be appropriate to do so: Faiello v. Faiello, 2019 ONCA 710 at paras 45-47.
31The Divorce Act does not confer the authority to set aside an agreement per se, but a valid separation agreement is a factor for the court to consider in deciding whether to exercise its authority under s. 15.2 of the Divorce Act to award corollary spousal support:
15.2 (1) A court of competent jurisdiction may, on application by either or both spouses, make an order requiring a spouse to secure or pay, or to secure and pay, such lump sum or periodic sums, or such lump sum and periodic sums, as the court thinks reasonable for the support of the other spouse.
(4) In making an order under subsection (1) or an interim order under subsection (2), the court shall take into consideration the condition, means, needs and other circumstances of each spouse, including
(a) the length of time the spouses cohabited;
(b) the functions performed by each spouse during cohabitation; and
(c) any order, agreement or arrangement relating to support of either spouse.
32The analysis in Miglin v. Miglin, 2003 SCC 24 articulates a two-stage inquiry in the face of a claim for spousal support that is inconsistent with a pre-existing agreement by the parties.
33At the first stage, the court considers when the agreement was made and the circumstances in which it was negotiated and signed in determining whether there is any reason to discount it: Miglin at para 80. Where there is no reason to discount an agreement due to the conditions in which it was made, the court then considers whether the agreement substantially complies with the overall objectives of the Divorce Act by considering the agreement as a whole, bearing in mind that all aspects of the arrangement are inextricably linked and that the parties have a large discretion in establishing priorities and goals for themselves: Miglin at para 84. Where the circumstances under which the agreement was negotiated were satisfactory and the agreement when made substantially complied with the general objectives of the Divorce Act, the court is to defer to the parties’ wishes and give the agreement great weight: Miglin at para 87; Faiello at paras 45-46.
34At the second stage, the court may be persuaded to give the agreement little weight if, and only if, the circumstances at the time of the application raise a significant departure from the range of reasonable outcomes anticipated by the parties, in a manner that puts them at odds with the objectives of the Divorce Act: Miglin at para 91; Faiello at para 47.
The Final Minutes of Settlement
35I am satisfied that the Final Minutes of Settlement constitutes a binding agreement and a marriage contract within the meaning of s. 52 of the Family Law Act by dealing with the division of property and support obligations on marriage breakdown. Although made in writing and signed, the agreement was not witnessed as required by ss. 55(1) of the Family Law Act. Nevertheless, I am satisfied that the failure to have the Final Minutes of Settlement witnessed should not render the agreement unenforceable. There is no evidence to suggest any oppression or unfairness in the circumstances that surrounded the negotiation and execution of the Final Minutes of Settlement, or any other vulnerability or unfairness to vitiate the agreement. Through counsel, both parties negotiated the settlement terms and drafted the minutes at a judicial conference. Importantly, both parties assert that the Final Minutes of Settlement as signed are binding. In the circumstances, I accept that the parties entered into a domestic contract by formalizing and executing the minutes of settlement fully intending to be bound to its terms. Accordingly, I am satisfied that the strict requirements of ss. 55(1) should be relaxed in the particular circumstances of this case: Gallacher v. Freisen, 2014 ONCA 399 at para 27; Virc v. Blair, 2014 ONCA 392 at paras 77-81.
36The Final Minutes of Settlement ratified the Joint Agreement with some modifications, and also introduced some additional settlement terms. By executing the Final Minutes of Settlement, the parties clearly entered into a full and final settlement agreement of all issues raised in this proceeding, as both expressly acknowledged in paragraph 1 to the Final Minutes of Settlement.
37The Joint Agreement was not drafted by a lawyer, but instead was prepared by the father (i.e., in consultation with his counsel) in an effort to resolve the family dispute after engaging in direct settlement discussions with the mother on October 6 and 13, 2016. As noted in the recital clause to the Joint Agreement, both parties made compromises during negotiations before reaching an agreement on the settlement terms in the Joint Agreement. Although the Joint Agreement lacks some of the language usually found in domestic contracts, I am satisfied that the clear intent of both parties was to resolve the remaining issues in dispute, namely spousal support, equalization (i.e., including certain specific payment arrangements), all of the parenting issues (i.e., primary residence, decision-making and parenting time) for their dependent children, child support (i.e., and insurance to secure Therecian’s interests), and certain s.7 payments related to Stephanie’s post-secondary education. In my view, the Joint Agreement is a thoughtfully crafted document that was carefully prepared to capture the agreement of the parties after negotiations that resulted in a balanced, fair and affordable resolution of this proceeding following a number of exchanges. From the evidence at trial, I accept that the father signed the Joint Agreement on November 18, 2016 before giving it to the mother who took some time to consider and reflect on its terms before signing the agreement on December 21, 2016. Thereafter, the parties revisited the Joint Agreement and modified some of its terms (i.e., to clarify the amount of s.7 arrears, to dispense with a payment as certain funds were never realized, and to lower a payment owed to the father) before signing the Final Minutes of Settlement on January 7, 2020 to ratify the Joint Agreement as amended. Notably, the Final Minutes of Settlement imposed some obligations (i.e., by requiring a release to be signed, disclosure to be provided, and payments to be made) to finally resolve all of the remaining issues in this matter. Taking everything into account, and on a plain reading of the terms in the Final Minutes of Settlement, I am satisfied that the parties clearly intended to fully resolve this entire proceeding by entering into the Final Minutes of Settlement. In the particular circumstances of this case, I find that no other reasonable conclusion may be reached: Sattva at para 47; Resolute at para 74; MacDougall at para 22.
The Final Minutes of Settlement Should Not be Set Aside
38I find that the Final Minutes of Settlement should not be set aside. In my view, the father has not met any of the criteria under ss. 56(4) of the Family Law Act to warrant setting aside the Final Minutes of Settlement. In any event, I would find that the court should not exercise its discretion to set aside the agreement.
39The father claims that the mother did not fully disclose the per diem that she received for serving as a foster parent to a number of foster children in her care at the family home. However, before the Final Minutes of Settlement were signed, the father was well aware that the mother was receiving a per diem stipend as a foster parent. The mother had been a foster parent for years, even prior to separation, when the parties had pooled their incomes to jointly pay household expenses. As the mother had a lead role in managing the family’s finances, the father claims to have been under-informed about their financial affairs and her income. However, I accept that the father had reasonable knowledge of the mother’s income based on her contributions to the family’s jointly-shared expenses, particularly given their relatively tight budget due to the heavy debt burden they had incurred from their failed restaurant business along with their carrying costs for both the Hollowgrove and Chalkfarm properties. In the circumstances, I am satisfied that the father had more than sufficient knowledge of the mother’s income when he agreed to resolve spousal support by signing the Final Minutes of Settlement on January 7, 2020.
40I am not persuaded that the father somehow failed to understand the nature or consequences of entering into the Final Minutes of Settlement (i.e., which ratified the Joint Agreement) on January 7, 2020. That day, the parties with their counsel drafted and signed the Final Minutes of Settlement at an exit pre-trial conference as this case was listed for trial in the sittings that month. By then, both parties had a real understanding of the issues in dispute, the evidence for trial, such as it was, and the risks that each would face by proceeding to trial. Taking everything into account, I see no basis to find that either party suffered from any undue pressure or strain in executing the Final Minutes of Settlement, or were otherwise unable to meaningfully understand or appreciate the nature and consequences of the agreement as signed.
41The father submits that the Final Minutes of Settlement should be set aside for being unconscionable. Respectfully, I am not persuaded by his submissions. The terms for the Final Minutes of Settlement were negotiated and drafted with the assistance of counsel at a conference. There is no evidence to suggest that either party took advantage of the other. Both freely entered into the agreement by their own choice and volition. It was open for the father to not enter into the agreement, or to take additional time before deciding on whether to sign the agreement. In addition, it is noteworthy that the Final Minutes of Settlement contain important concessions by the mother which clearly benefitted the father. Among other things, the parties mutually agreed at paragraph 2 of the Final Minutes of Settlement to remove the father’s obligation to make a $6,466.30 payment (i.e., 10% of his anticipated $64,663.00 IRS tax refund for a prior U.S. tax filing) to the mother, as initially set out at paragraph 8 of the Joint Agreement, after both came to accept that the tax refund would not be realized. In addition, the mother agreed to pay the father $9,000.00 in interest on unpaid net proceeds of sale (i.e., which she owed under paragraph 11 of the Joint Agreement), after the parties mutually agreed to a reduction of an unpaid principal amount from $130,000.00 to $110,000.00 (i.e., under paragraph 5 of the Final Minutes of Settlement). Taking this all into account, I accept that the Final Minutes of Settlement reflected the outcome of rational and not unreasonable negotiations on the part of both parties. In the circumstances, I am not persuaded that the terms of the Final Minutes of Settlement rose to a level of unconscionability. Accordingly, I find that the Final Minutes of Settlement were satisfactorily negotiated, that it substantially complied with the general objectives under the Divorce Act, and that the court should defer to the parties’ wishes and place great weight to the agreement: Miglin at para 87; Faiello at paras 45-46.
Spousal Support
42As set out below, I am satisfied that the parties settled the mother’s spousal support claim by agreeing on terms under the Final Minutes of Settlement that should not be varied at this time.
43Paragraph 1 of the Joint Agreement provides as follows:
- 77,000 lump sum payment to Joan McPherson out of my half of the equalization as spousal support. 3
44This clause makes it clear that the parties mutually agreed to settle the mother’s spousal support claim by having the father pay her $77,000.00 from his equalization share. Moreover, both parties take the position that the Final Minutes of Settlement (i.e., which ratified their deal to settle spousal support under the Joint Agreement as amended) is now binding. The father claims that the mother verbally agreed that her claim for spousal support would be waived in exchange for having the matrimonial home. The mother flatly denies the father’s assertion, which is wholly uncorroborated. On balance, I find that the father has not established that the Final Minutes of Settlement and/or the amended Joint Agreement do not include all terms for the parties’ agreement to implicate a collateral oral contract: R. v. Marshall, [1999] 3 SCR 456 at para 10, citing S.M. Waddams, The Law of Contracts (3rd ed. 1993) at para 316. In any event, neither the incomplete nor collateral agreement exceptions apply where parol evidence would contradict the terms of a written agreement, in which case the written agreement is applied and the extrinsic evidence is inadmissible: L’Agence Monitaire de Qatar v. Himadeh, [1996] O.J. No. 4467 (C.A.), leave to appeal refused [1997] SCCA No 110. Accordingly, I decline to accept the father’s evidence on this point.
45In any event, by applying the Miglin analysis, I would find no basis to vary the spousal support agreement under the Final Minutes of Settlement. As set out in my earlier analysis under ss. 56(4) of the Family Law Act, I see no reason for the court to discount the agreement based on the circumstances in which it was negotiated and signed: Miglin at para 80; Faiello at para 45. Having regard to the terms of the spousal support agreement within the context of the Final Minutes of Settlement, I am satisfied that the substance of the agreement substantially complies with the overall objectives of the Divorce Act. In arriving at this finding, I am mindful that all aspects of the agreement are inextricably linked, and that each party exercised their discretion in negotiating the settlement terms to achieve a bargain that fulfilled their respective priorities and goals: Miglin at para 84; Faiello at para 46. Taking everything into account, I would find that the court should defer to the parties’ wishes and assign considerable weight to their agreement under the Final Minutes of Settlement: Miglin at para 87; Faiello at para 46.
46Turning to the second stage of the Miglin inquiry, I do not accept that the spousal support agreement significantly departs from a range of reasonable outcomes as anticipated by the parties, or in a manner that puts them at odds with the objectives of the Divorce Act: Miglin at para 91; Faiello at para 47. In advance of the January 7, 2020 exit pre-trial conference, the mother served the father with DivorceMate calculations which indicated a range of monthly spousal support from $432.00 to $848.00 for an indefinite duration based on the parties’ annual 2015 and 2016 incomes (i.e., being $75,096 and $77,714.00 for the father, and $3,440.00 and $3,417.00 for the mother, respectively). Taking this into account, I am not persuaded that the $77,000.00 lump sum amount to settle spousal support was unfair or unconscionable to justify having the settlement set aside. Having regard to the mother’s entitlement to spousal support for an indeterminate period following a 24-year marriage, which the father did not seriously challenge, the $77,000.00 lump sum figure does not seem unreasonable, particularly if their dependent adult children reach a point where they are no longer dependent children of the marriage.
47The father submits that the support calculations should have properly imputed more income to the mother on account of her per diem stipend from her work as a foster parent. I accept that a sizable portion of her income is derived from these per diem payments which are exempt from her income tax: ss. 81(1)(h) of the Income Tax Act, RSC 1985, c.1 (5th Supp); Cole v. Cole, 2010 BCSC 1330 at para 15. In addition, I accept that ss. 19(1)(b) and (h) of the Federal Child Support Guidelines (i.e., which serve as a starting point in determining income when assessing the quantum of spousal support under the Spousal Support Advisory Guidelines) permit the court to impute a income for support based on a per diem received for serving as a foster parent: Fraser-Tabak v. Tabak, 2016 ABCA 79 at paras 76-86. It follows that the court may impute income to the mother if appropriate: Cole at para 15; Lonergan v. Lonergan, 2011 ONSC 1410 at paras 32 and 37. From the limited evidence adduced on this point, it seems that the mother’s monthly per diem is about $3,900.00, net of any other allowances, based on a September 2017 statement. The father submits that the mother’s income should be imputed at $15,000.00 annually based on Taylor J.’s approach in Lonergan at para 37 which imputed this amount to a party in receipt of a $3,240.00 monthly per diem, net of allowances, for working as a foster parent. However, imputing $15,000.00 in annual income to the mother, with one child residing with her, gives a DivorceMate calculation (i.e., based on the father’s $77,714.00 annual income) that ranges from $371.00 to $847.00 in monthly spousal support over an indefinite period. Even if her annual income were to be imputed at $33,000.00 (i.e., to approximate a minimum-wage annual income), without any children residing with her, the DivorceMate calculation for spousal support would range from $1,341.00 to $1,748.00 per month over an indefinite period. In light of this, and the potential scenarios by which the mother could assert an entitlement to spousal support, I am not persuaded that the $77,000.00 lump sum in the Final Minutes of Settlement to settle her spousal support claim is unfair or unconscionable given his spousal support exposure once these support calculations are applied or projected.
Equalization
48I am satisfied that the parties mutually agreed to settle equalization under the Final Minutes of Settlement, and that this agreement should not be varied.
49Paragraph 2 of the Joint Agreement provides:
- I agree and accept Exhibit AC Equalization Payment.
50As explained earlier, the parties had their accountant, Ms. Waldron, prepare a net family property statement which they used to resolve equalization by agreeing to her figures in the statement (i.e., which they essentially agreed to apply as a joint net family property statement). By instructing Ms. Waldron to prepare the joint net family property statement, each party accepted that she would prepare the statement in diligent and reasonable fashion. Once it was prepared, both parties reviewed the joint statement and accepted its contents by signing the document on October 9, 2016. As previously mentioned, the joint net family property statement indicated that the father owed a $316,779.00 equalization payment to the mother.
Post-Separation Adjustments
51In my view, each party should have a post-separation adjustment in accordance with the following reasons.
52At a case conference held on June 7, 2016, Snowie J. ordered the father to continue making bi-weekly mortgage and utility payments for the matrimonial home, pending further order of the court. The apparent intention behind this order was to preserve the status quo. Thereafter, both parties agreed that the mother would have full and sole possession of the matrimonial home and, in exchange, would be responsible for paying all upkeep costs including the mortgage on the home. But given Snowie J.’s temporary order, and as an act of good faith, the father continued to pay the mortgage on the matrimonial home (i.e., that came to about $656.54 bi-weekly) until the mortgage was paid off in full in January 2018. From the record, I accept that the father paid a total of $26,792.52 towards the mortgage on the matrimonial home (i.e., being forty (40) mortgage payments of $656.54 from June 17, 2016 to December 15, 2017, plus a final payment of $530.92 on January 24, 2018). Accordingly, I find that the father should have a post-separation adjustment of $26,792.52, payable by the mother, in order to account for this.
53As mentioned earlier, Shaw J. ordered $63,164.56 to be paid to the mother from the net sale proceeds held in trust for Chalkfarm to satisfy the father’s outstanding payment obligations to her (i.e., his $59,829.00 share of the matrimonial home’s carrying costs under Snowie J.’s consent order dated June 7, 2016), and his $3,334.35 share of Alexcya’s tuition fees under Baltman J.’s consent order dated August 16, 2018. Although the mother received this $63,164.56 payment from the proceeds held in trust, the payment was not drawn from the father’s share of the proceeds. To rectify this, I am satisfied that the mother should have a post-separation adjustment so that her share of the proceeds held in trust are not impacted by this payment.
Parenting Agreement
54Under paras 3 and 4 to the Joint Agreement, as ratified by the Final Minutes of Settlement, the parties agreed that the mother would have “full custody” (i.e., primary residence and sole decision-making responsibility) of Alexcya and Therecian, and encourage the children to share parenting time with the father (n.b., by this time, Stephanie was an independent adult and no longer a dependent child of the marriage). The parties also agreed that the father would exercise custody if the mother became incapacitated. Neither party takes issue with any of these parenting terms.
Child Support
55In my view, child support should be payable as set out in the following reasons.
56When the parties separated on May 29, 2015, Alexcya and Therecian were living with the mother at the matrimonial home while attending secondary school. At the time, Stephanie was a student at the University of Windsor and would reside with the mother during school breaks. As all three (3) the children were enrolled in secondary and post-secondary education programs, I find that the mother has shown that all were dependent children of the marriage who were entitled to receive child support: Edwards v. Edwards, 2021 ONSC 1550 at paras 34-35, citing Menegaldo v. Menegaldo, 2012 ONSC 2915 at para 157.
57As Stephanie was of majority age, ss. 3(2) of the Federal Child Support Guidelines, SOR/97-175, applied:
Child the age of majority or over
3(2) Unless otherwise provided under these Guidelines, where a child to whom a child support order relates is the age of majority or over, the amount of the child support order is
(a) the amount determined by applying these Guidelines as if the child were under the age of majority; or
(b) if the court considers that approach to be inappropriate, the amount that it considers appropriate, having regard to the condition, means, needs and other circumstances of the child and the financial ability of each spouse to contribute to the support of the child.
58In determining support for a child of majority age, ss. 3(2)(b) requires the court to consider whether the child is able to make a contribution to their support. The section requires the court to consider the child’s means in the context of the financial ability of each parent to contribute to the support of the child: Lewi v. Lewi (2006), 80 OR (3d) 321 (CA) at paras 127-129 and 141-142.
59Given the limited nature of the evidence, I am largely unaware of what Stephanie’s living expenses and financial circumstances (i.e., her income, bursaries, scholarships and student loans, if any) were during her post-secondary education. Similarly, I heard no meaningful evidence on any of this with respect to Alexcya and Therecian, apart from the fact that Alexcya received some OSAP funding. Accordingly, in the absence of adequate evidence for conducting an analysis under ss. 3(2)(b) of the Guidelines, I shall order child support by applying table amounts.
60As mentioned earlier, Alexcya and Therecian are currently completing their post-secondary education while residing with the mother at the Hollowgrove matrimonial home. I am satisfied that both remain dependent children who are entitled to child support.
61In 2015, the father’s annual income was $58,730.00. Applying this income figure, the table amount of child support for three children was $1,164.00 per month. Accordingly, child support from June 1, 2015 to December 31, 2015 amounted to $8,148.00 (i.e., $1,164.00 x 7 months).
62In 2016, the father earned $77,714.00 in annual income, which gave a table amount of child support of $1,541.00 per month for three children. It follows that child support from January 1, 2016 to June 30, 2016 was $9,246.00 (i.e., $1,541.00 x 6 months).
63From the record, I find that Stephanie graduated from her program at the University of Windsor in or around June 2016. At trial, both parties agreed that she was no longer a dependent child of the marriage after graduating from university. Accordingly, I accept that Stephanie’s entitlement to child support ended as of June 30, 2016.
64On June 7, 2016, the parties attended a case conference. At the conference, Snowie J. made a consent order for the father to pay $800.00 in monthly interim child support (i.e., by imputing his income at $75,000.00 annually) starting on June 15, 2016 and payable on the 15th day of each month thereafter pending further court order or the return of a child support motion after further disclosure. Snowie J. reserved the issue of retroactive child support to the motion judge. In the circumstances, I accept that Snowie J.’s interim child support order was made without prejudice to any retroactive child support claims and any future reconciliation after the father’s actual income was disclosed. Since June 15, 2016, the father has regularly paid $800.00 in monthly child support to satisfy his support obligation under Snowie J.’s interim consent order, which FRO has enforced.
65As stated earlier, the father’s actual 2016 income was $77,714.00 (i.e., not $75,000.00 as imputed at the June 7, 2016 conference). Applying his actual income, table child support for two children is $1,178.00 per month, which leaves child support for the period from July 1, 2016 to December 31, 2016 amounting to $7,068.00 (i.e., $1,178.00 x 6 months). Over this period, the father paid a total of $4,800.00 in child support (i.e., $800.00 in monthly child support from July 15, 2016 to December 15, 2016). In light of this, I find that the father owes $2,268.00 in child support arrears (i.e., $7,068.00 - $4,800.00) over this period.
66On October 6 and 13, 2016, the parties engaged in direct settlement discussions to resolve the issues in dispute. Following negotiations, the parties agreed on settlement terms which the father prepared in the Joint Agreement which he signed on November 18, 2016 and gave to the mother as a settlement proposal for her consideration. After considering the father’s proposal, the mother signed the Joint Agreement on December 21, 2016 and provided the father with the fully executed agreement.
67Paragraph 5 of the Joint Agreement provides as follows:
- Child support of $1000.00 for two children, Alexcya and Therecian McPherson until such time that they have pass the emancipated age of 18 and are no longer attending University or college. In the event that the Affordability exist in the future, I will be happy to increase the amount.
At trial, the father sought to lead evidence about how the child support term in the Joint Agreement was negotiated, and what the parties intended. Although he gave evidence that was relevant to the interpretation of the terms of the agreement which was admitted for the purpose of explaining the surrounding circumstances to the agreement, his subjective evidence of the parties intentions in negotiations was contrary to the parol evidence rule and inadmissible for this purpose: Sattva at paras 59-61; 2356802 Ontario Corp. v. 285 Spadina SPV Inc., 2022 ONSC 7318 at para 53. The purpose of the parol evidence rule is to achieve finality and certainty in contractual obligations, and to hamper a party’s ability to use fabricated or unreliable evidence to attack a written contract: Sattva at para 59, citing United Brotherhood of Carpenters and Joiners of America, Local 579 v. Bradco Construction Ltd., [1993] 2 S.C.R. 316 at 341-42. Applying the parol evidence rule, the father’s evidence of the surrounding circumstances could not add to, subtract from, vary, or contradict the words of the written agreement: Ibid; 235 Ontario Corp. at para 53.
68By executing the Joint Agreement, I find that the parties mutually agreed to settle child support at $1,000.00 per month starting on January 1, 2017, subject to: a) the children no longer being dependent children of the marriage (i.e., after attaining the age of majority and completing their post-secondary education); and b) any future increases to the amount of child support payable by the father based on “affordability” that may exist in the future. Having regard to the language in paragraph 5 of the Joint Agreement, I accept that this clause is quite clear and unambiguous in its family law context. The words used to explain when child support is no longer payable clearly track the key principles that apply in assessing whether a child of majority age remains a dependent child of the marriage who is entitled to support during their post-secondary education: Edwards at paras 34-35; Menegaldo at para 157. Furthermore, the words expressly provide that the father “will be happy to increase the amount [of child support]” in the event that “affordability” exists in the future. When read in its proper context, I am satisfied that this term clearly set out the father’s agreement to pay more child support if future increases to his income allowed him to afford this. The concept of adjusting support this way is commonly found in many support agreements to align with a support payor’s obligations. As the parties prepared and considered the Joint Agreement in consultation with counsel, I accept that the agreement was intended to align with these principles.
69Based on the foregoing, I find that the father was to pay $1,000.00 in monthly child support under the Joint Agreement once accepted. Accordingly, I find that his child support obligation from January 1, 2017 until December 31, 2017 totalled $12,000.00 (i.e., $1,000.00 x 12 months). Over this period, the father actually paid $9,600.00 in child support (i.e., $800.00 x 12 months), which resulted in arrears of $2,400.00 (i.e., $12,000.00 - $9,600.00) in child support for 2017.
70In 2018, the father’s work income (i.e., excluding any capital gains) came to $70,426.00. Although the mother took the position that the father’s income should be $194,524.00 based on his notice of assessment for that year, I am satisfied that his 2018 notice of assessment included income amounts reflecting a non-recurring capital gain from the sale of the Chalkfarm property. 4 In the circumstances, I am satisfied that it is fair and appropriate to not include this capital gain in determining the father’s annual income for child support purposes: ss. 17(2) (Non-recurring losses) of the Federal Child Support Guidelines. A capital gain from a one-time capital sale will rarely be considered income for support purposes: Saroli v. Saroli, 2021 ONSC 4450 at para 216.
71Applying $70,426.00 as the father’s income for 2018, the table amount of child support for two children came to $1,074.00 per month (i.e., leaving a fairly minor $74.00 monthly difference from his $1,000.00 per month child support obligation under the Joint Agreement). Given the limited nature of this difference, I am persuaded that it would be fair and reasonable to maintain child support at $1,000.00 per month for 2018 (i.e., for a total child support obligation of $12,000.00 for the year) in view of the parties’ settlement under the Joint Agreement and the minor fluctuation to the father’s income from 2016 when child support was settled: ss. 17(1) (Pattern of income) of the Federal Child Support Guidelines. In 2018, the father paid $9,600.00 in total child support (i.e., $800.00 x 12 months), which left arrears of $2,400.00 (i.e., $12,000.00 - $9,600.00).
72In 2019, the father’s had $79,274.00 of income, which gave a table amount of $1,200.00 in monthly child support for two children, for a $200.00 per month difference between the table and settled amounts for child support. Although the difference is not negligible, I find that the father’s income, when averaged over the prior three years, did not fluctuate to an extent that would warrant increasing child support for that year: ss. 17(1) of the Federal Child Support Guidelines. In turn, I find that his 2019 child support obligation was $12,000.00 (i.e., $1,000.00 x 12 months). As he actually paid $9,600.00 (i.e., $800.00 x 12 months) in child support, his arrears of child support came to $2,400.00 (i.e., $12,000.00 - $9,600.00) for that year.
73In 2020, the father’s work income totalled $84,375.00, which results in a table amount of $1,275.00 for supporting two children. But at the January 7, 2020 conference, the parties entered into Final Minutes of Settlement that ratified the Joint Agreement as amended by which the parties continued to agree that the father would pay $1,000.00 per month in child support for Alexcya and Therecian. As discussed earlier, the parties also negotiated other changes to the Joint Agreement through counsel, including a number of financial and property-related issues that clearly reflected a number of compromises that were made during the course of negotiations. Taking this all into account, I am satisfied that the parties made reasonable arrangements for the support of the children by agreeing not only on child support payments but also on the disposition of family property and funds under a comprehensive and global settlement of all remaining issues, which I accept was fair and reasonable in the circumstances. As a result, I find that the father’s child support obligation in 2020 came to $12,000.00 (i.e., $1,000.00 x 12 months). As he had paid $9,600.00 in support in 2020 (i.e., $800.00 x 12 months), his child support arrears came to $2,400.00 (i.e., $12,000.00 - $9,600.00) for that year.
74The father’s 2021 income was $90,155.00, which results in table support of $1,353.00 per month for two children. As his income increased substantially, I find on balance that he could afford to pay increased child support and, therefore, should pay additional child support pursuant to paragraph 5 of the Joint Agreement. By applying his 2021 income, his child support obligation that year totalled $16,236.00 (i.e., $1,353.00 x 12 months). As he had paid $9,600.00 (i.e., $800.00 x 12 months) in child support, his 2021 arrears came to $6,636.00 (i.e., $16,236.00 - $9,600.00).
75No evidence of the father’s income after 2021 was introduced. In the circumstances, I find that it is fair and reasonable to impute his income at $90,155.00 (i.e., based on his 2021 income) in determining his child support obligations for 2022 and 2023, respectively. Applying my earlier calculations for 2021, I find that his 2022 child support arrears come to $6,636.00 (i.e., [$1353.00 - $800.00] x 12 months). In addition, I find that his child support arrears from January 1, 2023 to September 30, 2023 amount to $4,977.00 (i.e., [$1,353.00 - $800.00] x 9 months).
76Based on the foregoing, the father’s child support arrears from June 1, 2015 to September 30, 2023 are summarized as follows:
2015 $8,148.00 2016 $11,514.00 (i.e., $9,246.00 + $2,268.00) 2017 $2,400.00 2018 $2,400.00 2019 $2,400.00 2020 $2,400.00 2021 $6,636.00 2022 $6,636.00 2023 $4,977 (to September 30, 2023) Total $47,511.00
Insurance Coverage
77I am satisfied that the father arranged for appropriate insurance coverage to fulfill his obligations under the Joint Agreement as ratified by the Final Minutes of Settlement.
78Under paragraph 6 of the Joint Agreement, the father agreed to the following:
- Take out an Affordable life insurance policy with Therecian McPherson as beneficiary. Due to her mild learning disability that can affect her future independence.
79On April 1, 2010, the father registered Stephanie, Alexcya and Therecian for life, medical and dental coverage under his employer’s group benefits plan. Alexcya and Therecian are still entitled to receive coverage under the group plan. However, Stephanie’s coverage was terminated on January 1, 2018 as she was over 25 years of age, no longer in school and, thus, no longer eligible for coverage under the group plan terms. At trial, the father filed a letter from his employer to confirm the foregoing, to confirm that he never asked to remove or cancel the children’s coverage as the mother has alleged, and to further confirm that there was never any interruption in coverage for either Alexcya or Therecian, respectively.
80In my view, the father satisfied his obligation under paragraph 6 of the Joint Agreement by arranging for Therecian to have life and other coverage under his workplace group policy. Given the limited nature of his finances, I accept that his group plan offered the only affordable coverage that he could reasonably have been expected to obtain for the child.
81During her evidence, the mother testified about certain difficulties that arose when she tried to submit benefit claims for the children under the father’s group policy. Unfortunately, a number of communication gaps arose between the mother, the father, and the group plan administrator, at various times and for varying reasons (i.e., including incomplete claims and non-responsiveness to inquiries), that caused some understandable frustration. That said, I am satisfied that the father fulfilled his obligations under the Joint Agreement, and that these communication issues should not be solely attributed to him. In the future, I would encourage the mother to engage directly with the administrator, to the extent possible, to resolve any claims issues that may arise.
Tuition Payment
82As set out below, I am satisfied that the father owes the mother $27,000.00 (i.e., as his share of Stephanie’s university tuition costs) in settlement of her claim for s.7 expenses.
83Pursuant to paragraph 3 of the Final Minutes of Settlement, which amended paragraph 7 of the Joint Agreement, the father agreed to make a $27,000.00 payment to the mother as his share of Stephanie’s university tuition. Paragraph 3 of the Final Minutes of Settlement provides:
The Parties hereby amend paragraph 7 [of the Joint Agreement] as follows:
The Respondent shall pay half of the $54,000.00, being $27,000.00 for Stephanie McPherson’s tuition. These funds will not come out of the proceeds of sale of the Chalkfarm property described [below].
84At trial, the father asserted that the mother had not properly shown that Stephanie had actually paid $54,000.00 in tuition for her post-secondary education. In turn, he took the position that he should not have to pay the $27,000.00 until she had satisfactorily made disclosure to show that these costs had been incurred. Respectfully, I am not persuaded by this submission. As clearly set out in the Joint Agreement and the Final Minutes of Settlement, the father agreed to make the $27,000.00 payment with the only condition being that payment would not come out of proceeds of sale for the Chalkfarm property. By agreeing to these terms, I am satisfied that he effectively waived any ability to insist on further disclosure before making the payment. As set out earlier, the parties initially agreed to resolve this matter in the Joint Agreement before later agreeing to the Final Minutes of Settlement on January 7, 2020 at a conference shortly before this matter was to be called for trial. Had the father wanted further disclosure, it was incumbent on him to ask for it before entering into an agreement to settle the mother’s s.7 claim in this fashion.
85The father also argued that he should be excused from paying the $27,000.00 as Stephanie had received OSAP funding which potentially relieved her from having to incur this tuition cost. In the alternative, the father proposed that he pay OSAP directly for his share of the child’s tuition costs instead of paying them to the mother. In my view, neither proposal is fair, reasonable or appropriate in the circumstances of this case. Having previously agreed to settle the mother’s claim for s.7 expenses under the Joint Agreement, and then under the Final Minutes of Settlement, it is no longer open for the father to seek to vary the settlement terms at this time.
The IRS Refund
86I am satisfied that both parties agreed to delete the IRS refund figure (i.e., which was estimated to be about $64,663.00 in the Joint Agreement, and was referred to as $64,000.00 in the Final Minutes of Settlement) from the settlement as these funds were never received by the father.
87Paragraph 2 of the Final Minutes of Settlement expressly amended paragraph 8 of the Joint Agreement as follows:
The Parties, in executing this, adopt and incorporate the terms of the Joint Agreement, except as specified below, and any variation as appearing below shall constitute an amendment of the said agreement which shall be incorporated and form part of the “Joint Agreement. The parties hereby amend paragraph 8 as follows:
The parties agree and consent that the stated amount of $64,000.00 does not exist, as originally contemplated and that no payment as agreed to is payable and that paragraph 8 shall be deleted, except that the Respondent shall provide proof that the $64,000.00 or any amount is not payable to the Respondent, as contemplated under the said paragraph.
88This provision was not controversial at trial.
The Chalkfarm Property
89As noted earlier, the parties agreed on these terms regarding the Chalkfarm property at paragraph 6 of the Final Minutes of Settlement and paragraphs 9 and 10 of the Joint Agreement:
- The funds held in Trust will be used first to pay all capital gains that the Respondent owes to CRA for the sale of the Chalkfarm property described in the Joint Agreement, Schedule A, paras 9 & 10, excluding penalties and interest, and the Respondent is directed to re-file his 2018 taxes within 30 days of the execution of this agreement.
- The property at Chalkfarm Cres. will be sold. After deducting the current mortgage [balance] owing; the remainder will be used to satisfy the joint marital debt of the Hollowgrove Blvd. line of credit (310,581), the mortgage and the taxes due.
- That my portion of the settlement will be derived from both Chalkfarm Cres. and the Hollowgrove Property. Joan McPherson is obligated to make sure that I receive my portion out of the Hollowgrove Cres. within 90 days. This is to ensure that my portion is available to be used as a down payment on an Affordable house if the mortgage on Chalkfarm Cres. can be transferred.
90The foregoing terms were not seriously disputed at trial.
91The father ostensibly took the position that the $310,581 balance to the RBC line of credit for Hollowgrove should not be deducted from the Chalkfarm net proceeds as paragraphs 6 and 7 to the Final Minutes of Settlement list only two (2) payments to be deducted from the Chalkfarm net sale proceeds, namely a payment to CRA and a $119,000.00 payment to himself. However, paragraph 9 of the Joint Agreement (i.e., that he handwrote himself), which was not varied under the Final Minutes of Settlement, expressly provides for the $310,581.00 to be satisfied from the Chalkfarm proceeds. Accordingly, I reject his position on this point.
92The father submits that he was forced to incur unnecessary penalties and interest due to the mother’s refusal to release Chalkfarm sale proceeds to pay out his tax obligations to CRA under the terms of the Final Minutes of Settlement. However, her refusal to release these funds coincided with his apparent challenge to the enforceability of their settlement agreements. In any event, the father did not lead any meaningful evidence to show the penalties or interest that he purportedly incurred due to this impasse. As a result, I decline to grant any relief for this.
93In my view, the mother’s claim for a loss arising from the Chalkfarm property sale should not be granted as this relief was never pleaded. In any event, I am satisfied that the mother’s claim is too remote to warrant recovery.
94The parties bought Chalkfarm in 2007 for $309,000.00 as an investment property. For years, they used its rental income to pay its carrying costs. After separation, the mother insisted on personally collecting the rental income and sending funds to the father to pay the mortgage. However, the father claims that she stopped sending the rent money which left him unable to afford the mortgage payments (i.e., as he was solely paying the Hollowgrove mortgage and $800.00 per month in child support). After defaulting on the Chalkfarm mortgage, the parties sold the property to avoid a power of sale. On December 31, 2018, the sale price was reduced from $720,000.00 to $689,000.00 to allow for a quick sale. The mother seeks to recover the $31,000.00 loss claiming that the father deliberately refused to pay the mortgage which triggered a default that led to the loss. However, she never pleaded this loss claim and did not raise it until serving an affidavit just a few days before trial. As this claim was never pleaded, I find that it should be dismissed.
95In any event, I would find that the mother’s loss claim from the lowered listing price of the Chalkfarm property is too remote. The remoteness inquiry asks whether the harm is too unrelated to the wrongful conduct to hold the defendant fairly liable: Mustapha v. Culligan of Canada Ltd., 2008 SCC 27 at para 12, citing Overseas Tankship (U.K.) Ltd. v. Morts Dock & Engineering Co., [1961] A.C. 388 (P.C.). Although the mother produced e-transfer statements to show that she gave rent money to the father in a series of $1,700.00 transfers throughout 2017 and up to January 3, 2018 (i.e., one day after Chalkfarm’s sale closed), she did not adduce any meaningful evidence to explain who set Chalkfarm’s original listing price or whether it reflected a fair market price for the property. Moreover, there was no meaningful evidence to show why the listing price for Chalkfarm was reduced, or why it was lowered by $31,000.00 instead of a different amount. Accordingly, even if the father breached a duty of care that he owed the mother, I would find that her loss claim is too remote given the absence of meaningful evidence to establish that any damage was caused, either in fact or law, by his negligence: Mustapha at para 3.
Other Terms
96As set out above, the parties also agreed on the following terms at paragraphs 7 and 8 of the Final Minutes of Settlement and paragraph 11 of the Joint Agreement as amended:
- The Applicant shall receive the balance of the funds held in trust after the payment of the capital gains and payment of $119,000.00 to the Respondent.
- The Respondent shall provide the Applicant with a copy of his notice of assessment, proving the capital gains payable, prior to any payment of same from the funds held in trust, which shall be paid on the consent of both parties, directed to the real estate solicitor.
- The Applicant shall pay the Respondent $110,000.00 instead of $130,000.00 from the net proceeds plus $9,000.00 representing interest.
97None of these provisions were particularly controversial at trial. However, as the parties did not file detailed statements to show the current remaining balance of funds held in trust in relation to the payments owed under the agreements, the actual amount owing to the mother under paragraph 7 of the Final Minutes of Settlement is somewhat unclear at this time.
98It is clear that the father has not produced sufficient information to show how his purported capital gains were calculated in respect of paragraph 8 of the Final Minutes of Settlement. In his evidence, he admitted that he was unable to explain the capital gains, or the interest charged on the capital gains, as purportedly set out in his materials. Accordingly, I am satisfied that the father should be required to produce his CRA notice of assessment, as the parties expressly contemplated in paragraph 8 of the Final Minutes of Settlement, to prove the capital gains payable before any sale proceeds held in trust are released.
Outcome
99Accordingly, judgment shall issue as follows:
a. The father shall provide proof to the mother that the $64,000.00 as contemplated under paragraph 8 of the Joint Agreement, as amended by the Final Minutes of Settlement, is not payable to him; b. The father shall pay $27,000.00 to the mother for his share of Stephanie McPherson’s university tuition, which shall not come out of the proceeds of sale for the Chalkfarm property; c. The mother shall pay the father $110,000.00 plus $9,000.00 as interest, after which the father shall execute a release in favour of the mother in respect of the Hollowgrove property and further execute all such other documents to transfer the property into the sole name of the mother, in default of which the mother is authorized to execute such documents on his behalf; d. Funds held in trust will be used first to pay all capital gains that the father owes to CRA for the sale of the Chalkfarm property, excluding penalties and interest, and the father shall re-file his 2018 taxes forthwith if this has not yet been done; e. The mother shall receive the balance of the funds held in trust after the payment of the capital gains and the payment of $119,000.00 to the father; f. The father shall provide the mother with a copy of his notice of assessment, proving the capital gains payable, prior to any payment of same from the funds held in trust, which shall be paid on the consent of both parties, as directed to the real estate solicitor; g. The father shall pay $77,000.00 to the mother as spousal support; h. The father shall pay $316,779.00 to the mother for equalization; i. The mother shall have primary residence and exercise decision-making for the children Alexcya McPherson (born August 11, 2000) and Therecian McPherson (born November 20, 2022), which shall be assumed by the father should the mother become incapacitated; j. The father shall have parenting time with the children at the mother’s discretion, which she shall encourage to facilitate health paternal relationships between the children and the father; k. The father shall pay the mother $47,511.00 in child support arrears; l. As of October 1, 2023, the father shall pay monthly child support of $1,353.00 (i.e., based on an annual income of $90,155.00) for the children Alexcya McPherson (born August 11, 2000) and Therecian McPherson (born November 20, 2002); m. The father shall name the child Therecian McPherson (born November 20, 2002) as a life insurance beneficiary under his workplace group benefits plan for as long as she is eligible for this coverage; n. The net sale proceeds from the Chalkfarm property shall be used to satisfy the joint marital debt of the Hollowgrove property line of credit, the outstanding mortgage and the taxes due, after deducting the balance owing on the Chalkfarm mortgage; o. The father shall be paid his share of the balance of the Chalkfarm and Hollowgrove net sale proceeds; p. The father shall have a post-separation adjustment of $26,792.52; and q. The mother shall have a post-separation adjustment to rectify her allocated share of the proceeds held in trust for the Chalkfarm property due to the $63,164.56 payment she received under Shaw J.’s order dated July 18, 2019 (i.e., to satisfy a payment obligations owed by the father), that should have been paid from the father’s share of the proceeds but was paid without any such allocation.
100Should any issues arise with respect to any calculations or any payments, or should any issues arise in settling the form and content of a final order for this matter, I may be spoken to within 30 days from the release of these reasons.
101I encourage the parties to settle the matter of costs for the trial. However, if they are unable to do so, the mother may deliver written costs submissions of up to 5 pages (excluding her costs outline and/or offer(s) to settle) within 15 days, and the father may deliver responding costs submissions on the same terms within a further 15 days. Reply submissions shall not be delivered without leave.
M.T. Doi J. Date: October 6, 2023
Footnotes
Footnotes
- On December 6, 2018, the mother amended the application to bring a claim for arrears of spousal support pursuant to the Endorsement by Snowie J. dated June 7, 2016, and a constructive trust claim in respect of Chalkfarm (i.e., as the property was solely held in the father’s name) pursuant to the Endorsement by Seppi J. dated September 21, 2018), among other things. The father consented to the amendment of the application at the settlement/trial management conference held on September 28, 2018.
- Although the motion was adjourned to August 1, 2019, the motion was not returned as the mother chose to not seek a further release of funds from the Chalkfarm proceeds being held in trust.
- Paragraph 1 of the Joint Agreement was not varied under the terms of the Final Minutes of Settlement.
- On his 2018 notice of re-assessment, the father’s line 150 income figure is $194,524.00. However, as the father explained, this figure included his capital gains from the sale of the Chalkfarm investment property. Although the Chalkfarm sale closed on January 2, 2019, his accountant, in error, posted the capital gains to his 2018 income, instead of his 2019 income. At trial, the father advised that his accountant is taking steps to rectify his 2018 and 2019 filings with CRA.